A financial BLOG written by a DIY investor covering Singapore blue chips, dividend stocks, financial education, corporate news, money saving tips, book reviews and my journey to financial freedom. Currently managing a personal portfolio of more than SGD $1,000,000, I aspire to have an average cash flow of minimum $10,000 per month either through realised capital gains or dividends.

Friday, March 8, 2013

Finally bought a property! (Part 1)

The next few posts will document my
journey to search for a value property and the thinking process, dilemma I had
during the hunt.

The first property showroom I went
was Riversail near upper Serangoon Cresent. It was a private condominium developed by
Allgreen. The property was about 3KM from where I am staying. I like the
property for several reasons.

- Near to my current home. I am
familiar with surroundings such as Hougang Mall, Buangkok, Compass point, Nex,
Kovan heartland mall.

- Next to park connector that allows cycling
to punggol and kallang.

- Efficient internal layout, with
very little wastage space.

- Separate living and dining area
instead of having to split your living room to dining and living into half.

- Decent pricing of $850 PSF. A 2+
study 915 square feet unit will cost on average $778k. Assuming a modest rental
of $2,800 a month, gross yield is 4.3%.Even if rental is $2,500 monthly, gross
yield is 3.86% P.A.

- Downpayment of 5% cash will cost
only $39,000, the rest 15% of $117k can be paid by CPF since I am a first
timer. It is extremely affordable. Monthly installments will be about $2,150
@1.5% interest; $2,460 @ 2.5% interest and $2,800 @ 3.5% interest.

- Choice units are available and not
released yet. I can place a blank cheque and be almost assured to secure my
high floor 2+study pool view unit.

- Free 2 years shutter bus service to
Hougang MRT was available upon TOP, which looks attractive to my fiancée who
doesn’t drive.

- Nearby Executive Condominiums (EC)
like Heron Bay are selling on average $750 PSF. Just by paying about $100 PSF
higher, or about 100k more, I will not be subjected to HDB complex binding
rules and regulations. Even completed ECs (park green) are selling for $800 PSF
when it is already 10 years old.

Cons of the project

- Too many units of 900+

- Many condominiums under
construction, Austville was sold at about $700 PSF, boathouse residences at $900
PSF, Heron Bay at $750 PSF, BTOs and DBSS projects can be seen under
construction. It will definitely affect the traffic, rental yield, living
quality, resale value of Riversail, in time to come.

However, the main purpose of
purchasing a property is to ensure I have a roof over my head when my
parents pass on and the current HDB is dividend among my 2 siblings. Hence, my
consideration is for own stay rather than investment. Even if I were to sell
off 1-2 years upon TOP, it will be of good value given that boathouse
residences are selling for above $900 PSF, the ECs and HDB projects cannot be
sold until 5 years after TOP.

Despite benefits outweighing the
cons, I did not purchase Riversail and purchased another one 3.5KM away.

The very heart of your writing shilst sounding agreeable at first, did not settle very well with me personally after some time. Someplace within the paragraphs you were able to make me a believer but just for a while. I nevertheless have a problem with your leaps in assumptions and one would do well to fill in those breaks. In the event you actually can accomplish that, I will definitely end up being fascinated. Its such as you learn my thoughts! You seem to grasp so much approximately this, such as you wrote the ebook in it or something. I think that you simply can do with some% to force the massage house a bit, however other than that this is magnificent blog. An excellent read. I will certainly be back.executive condominium singapore

Singapore Blue Chips

Labels

About Me

I am an ordinary Singaporean guy in my early thirties who is passionate about investing since 2003.
I live in a 4 room HDB flat and like many Singaporeans, dream of becoming a millionaire.
Currently I am an ordinary worker and have just completed my Masters. I aspire to build up a portfolio of 1 million dollars and derive a yearly recurring dividend income of 6% by 35.
The only way to achieve this aim is to work hard and invest prudently.
I invest in a variety of instruments such as unit trusts, stocks, REITS and foreign currencies mainly Australian dollars options.